diff --git a/tools/run_tests/build_artifact_python.sh b/tools/run_tests/build_artifact_python.sh
index 7ba04d75463f3ef0dc26da70e759bf0bec60fcf2..1f23f9fade880b11152dc5f0da526577fa040869 100755
--- a/tools/run_tests/build_artifact_python.sh
+++ b/tools/run_tests/build_artifact_python.sh
@@ -35,15 +35,18 @@ cd $(dirname $0)/../..
 if [ "$SKIP_PIP_INSTALL" == "" ]
 then
   pip install --upgrade six
-  pip install --upgrade setuptools
+  # There's a bug in newer versions of setuptools (see
+  # https://bitbucket.org/pypa/setuptools/issues/503/pkg_resources_vendorpackagingrequirementsi)
+  pip install --upgrade 'setuptools==18'
   pip install -rrequirements.txt
 fi
 
+export GRPC_PYTHON_USE_CUSTOM_BDIST=0
+export GRPC_PYTHON_BUILD_WITH_CYTHON=1
+
 # Build the source distribution first because MANIFEST.in cannot override
 # exclusion of built shared objects among package resources (for some
 # inexplicable reason).
-GRPC_PYTHON_USE_CUSTOM_BDIST=0  \
-GRPC_PYTHON_BUILD_WITH_CYTHON=1 \
 ${SETARCH_CMD} python setup.py  \
     sdist
 
@@ -51,15 +54,11 @@ ${SETARCH_CMD} python setup.py  \
 # and thus ought to be run in a shell command separate of others. Further, it
 # trashes the actual bdist_wheel output, so it should be run first so that
 # bdist_wheel may be run unmolested.
-GRPC_PYTHON_USE_CUSTOM_BDIST=0  \
-GRPC_PYTHON_BUILD_WITH_CYTHON=1 \
 ${SETARCH_CMD} python setup.py  \
     build_tagged_ext
 
 # Wheel has a bug where directories don't get excluded.
 # https://bitbucket.org/pypa/wheel/issues/99/cannot-exclude-directory
-GRPC_PYTHON_USE_CUSTOM_BDIST=0  \
-GRPC_PYTHON_BUILD_WITH_CYTHON=1 \
 ${SETARCH_CMD} python setup.py  \
     bdist_wheel